PATISSERIE HOLDINGS (CAKE)

[johnhemming]

I don't suppose I will be the only person thinking that the auditors should have their hands in the same vice as the clients (shareholders) and feel at least some of the same pain.

Without ensuring true independence of appointment (so that auditors are appointed by the shareholders potentially against the opinion of the board) there will always be some problems. However, the number of really big frauds surviving for multiple years shows there is a problem.

It could be for a listed company that there needs to be an audit committee appointed by the members excluding any members who are board members.

[SteMiS]

Does anybody know if any charges (criminal or civil) have actually been brought against the finance director, Christopher Marsh? The last I heard he'd been released on bail (although that was back in 2019). Worth remembering in this context that during the 6 months leading up to the breaking of the news at Patisserie, Marsh was taking advantage of advances in the company share price (based on false accounting) to bank a cool £2m profit from selling shares granted under LTIPs.

[ADrunkenMarcus]

One would hope any such assets could be confiscated. Criminals aren't supposed to be able to keep the profit of their crimes. Isn't there a Proceeds of Crime Act or some sort which Labour brought in?

Best wishes

Mark.

[WickedLester]

One would hope any such assets could be confiscated. Criminals aren't supposed to be able to keep the profit of their crimes. Isn't there a Proceeds of Crime Act or some sort which Labour brought in?

Best wishes

Mark.

POCA orders have been used against Aidan Earley, Doug Ware and Alan Biggar after their tenure at Worthington Group. There is a long standing investigation by the FCA into the goings on there which will hopefully come to a conclusion soon.

[ADrunkenMarcus]

I'd love to know the full detail of what happened to CAKE. It's been over two years since this surfaced! Criminal proceedings would at least make it a public record.

Best wishes

Mark.

[ADrunkenMarcus]

City A.M. is reporting:

FRP Advisory has reportedly filed legal documents detailing Grant Thornton’s alleged errors in its auditing of Patisserie Valerie after launching a £225m court claim against the professional services firm. FRP Advisory, liquidator to the cafe chain, said the auditor’s negligence meant Patisserie Valerie bosses were unaware the firm had run out of funds. It alleges that Grant Thornton failed to uncover undisclosed overdrafts and accounts.
Legal documents accuse the firm of failing to ask why Patisserie Valerie received such little interest on its bank accounts, according to the Sunday Times. The newspaper reported that the cafe group earned £44,000 interest on a reported bank balance of £22.5m, an interest rate of just 0.2 per cent.
Credit card charges also fell from £502,525 to £355,899 within three years, despite the company supposedly growing, which FRP alleges Grant Thornton failed to question.

I think 0.2% is a good interest rate given that the £22.5 million of cash didn't exist.

Best wishes

Mark.

[gbjbaanb]

and to lighten things a little,. today's Dilbert is quite good:

https://dilbert.com/strip/2021-02-15

[XFool]

https://www.sfo.gov.uk/cases/patisserie-holdings-plc/

Investors update – 21 April 2021
If you invested funds in Patisserie Holdings PLC, we ask you to complete an investigation questionnaire. The information enables the SFO to build a more detailed and comprehensive understanding of the suspected wrongdoing and to continue to progress the investigation.

[ADrunkenMarcus]

I filled it in!